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Common Questions About Prepaid Plans

What is a prepaid plan?

A prepaid plan is a way of getting a phone service without the need for a credit check. They’re sold by most of the phone companies in Australia.

The distinguishing feature of a Prepaid Plan (or Prepaid Service) is that it is paid for before use. Prepaid users buy their access to a service, usually 28 days worth, before they make calls, get data or send SMSs. The major alternative to a prepaid plan is a postpaid SIM Only plan.

Generally, prepaid plans are seen as more affordable than postpaid plans.

They can also be less convenient. The reputation for (in)convenience is not fully deserved. It’s associated with prepaid because users sometimes run out of credit at inconvenient times. We usually suggest to people that they set up ‘auto-recharge‘ if they’re worried about this problem and use the Self Service apps available from the phone companies.

Which is better value, prepaid or postpaid?

Whether prepaid or postpaid plans are best value depends on how much you are spending and the phone company you’re considering.

However, perhaps surprisingly, at the lower end of spends ($30 and below), prepaid plans are usually the best value.

In fact, it’s true to say that you will get more data with many phone companies on their $30 prepaid plans than, say, their $30 SIM Only (postpaid) plan.

Can I keep my existing phone number if I buy a new prepaid plan?

Yes, whichever prepaid phone service you take (from whichever company) if you change from one phone company to another, you can take your phone number with you.

Should I buy my Prepaid SIM Online?

Generally, it makes sense to buy your prepaid SIM Online, yes. There are three reasons for that.

You are likely to get a better introductory offer: The Australian market for prepaid services is incredibly competitive. The phone companies know it’s a hassle to change providers. That means they have to make it worth your while to move. The result is strong acquisition offers from big and small phone companies alike. Because it’s cheaper for them to provide these offers online (without the cost of the retail infrastructure that the alternative involves) introductory offers are often better online.

Delivery is fast: The delivery of your SIM is usually next day to your home address.

They want everything online: I’ve been told that a call to one of twhe phone companies’ call centres costs them roughly $5. Servicing you online is much cheaper. As a result, the phone companies are trying to encourage all of their customer interactions through the website. Buying and recharging online is often the sort of thing phone companies want to provide you an incentive to do.

In short, you’re likely to get a better deal and save money if you go online for your prepaid service.

How do prepaid plans work?

How prepaid plans work

Get a starter SIM: To get going with a prepaid service, you need a starter SIM. You can order yours online. Ours are clearly marked in the table, above, on this page. Starter SIMs can be free, cheap or they come pre-loaded with credit (in which case, you can skip the first ‘recharge’ step below) in which case you’ll likely have to pay the face value of the plan when you buy the SIM. E.g. Buying a starter SIM for $30 will give you a SIM pre-loaded with $30 of credit.

Get it delivered: Most prepaid SIMs will be delivered to you within 24 hours from your online order. They will be provided to you in an envelope. In cities, you might get your SIM faster. In rural areas, it might take a bit longer.

Recharge: You may need to top up the service post activation if it was not ‘pre-charged’. You can recharge in a number of ways, most frequently with a bank card. Recharging will apply the credit to your service which can then be used in spend against a prepaid plan.

Use it: From that point on, you have until the ‘expiry period’ to use all of your mobile data, texting and national calls. You will also be able to receive calls from other phone users.

Repeat the same process at ‘expiry’: Once you run out, you simply recharge your SIM. That means you are buying more credit on your account. This allows you to continue using the network.

A Long Expiry Plan is one which has an expiry of longer than a month or so. Typically, Long Expiry Plans are paid for upfront – as all prepaid plans are but they cost more (because they are valid for several months.)

By paying in advance for multiple months of service, you’ll get sharper pricing (those plans will be cheaper.)

Each ‘recharge’ you buy (a ‘recharge’ is a real or virtual voucher which adds credit to your prepaid service account) has a validity period. That validity period is known as an ‘expiry’ or ‘recharge window’. Think of it as the life expectancy of your phone service.

For the major phone companies’ most popular plans, the term is often 28 or 35 days. When you recharge your account, you’ll get all of the service inclusions (voice, SMS and data) you pay for, made available to you for those 28 days. If you don’t use those service inclusions (or you don’t use them all up) in the 28 day period, you lose them.

How do prepaid phone plans work?

Everyone starts a prepaid service in the same way. They buy themselves a starter pack. The starter pack usually comes with an introductory offer. Mostly, these days, those offers are based on attention grabbing headline data inclusions. If you don’t work in the industry, you’ll know these offers because they say things like ’10 GB of data free with this SIM !’

Every few weeks at the end of the Recharge Window you will need to buy a new prepaid recharge and apply it to your account. The process involves you consciously deciding to recharge your account once every few weeks. That means you have to know where you are with your spending at all times. Or your service will stop. This forced behaviour is what makes prepaid a favourite plan type. You don’t run up a lot of unnecessary costs accidentally with prepaid plans.

Do I get a phone with my prepaid plan?

It depends. There are phones that you can buy in the prepaid section of a phone company retail or online store. But, you don’t need to buy a phone (if you already have one, it’ll work with a prepaid service.)

What happens if I do not recharge my SIM?

One of the best things about prepaid services is that, if you don’t need them or use them, they remain active but you don’t have to pay. If you run out of credit or reach the end of your recharge window, most companies will still send you texts from other people for a while.

If you leave it a long time – like 6 months long, for example, before you recharge, you are likely to find that your phone number has been recycled.

What's good

No contract or credit check required

Move to a new phone company & keep your number

Easy to avoid data overage charges

Great value deals from smaller phone companies

Regular promotions to get you the best deal

What's bad

Some Expiry Terms are short - check they suit you

The Best Australian Prepaid Plans – What you need to know

A prepaid plan is a plan including charges (e.g. $30 per month) and entitlements (e.g. Unlimited calls and SMS in Australia) which are paid for in advance. The plan is ‘attached’ to a SIM, which grants you access to one of the phone company networks. Users don’t need to pass a credit check to get a prepaid service.

The defining features of prepaid plans are:

People pay before they use a prepaid service: With prepaid plans you pay for the voice, SMS, data and any other services you are entitled to, for example, video content you are entitled to before you use them. Payment for the service is often undertaken in the form of a ‘recharge’. Once you’ve recharged, a prepaid service is said to have ‘credit’.

You are buying access for a period of time: Prepaid users buy access to their prepaid service over a chunk of time. That chunk is usually 28 days of service but can be as little as 1 day or as much as 365 days. The time the user has access to the prepaid service is known as an ‘expiry period’ – a term we define below.

Prepaid Plan features: We explain what prepaid plans include so you can determine what features you do and do not need.

Prepaid plan benefits: We show you the reasons prepaid plans work so well for some people. When you understand these, you will know if you’re the kind of person who would benefit from having one.

Comparing prepaid plans from the major providers: Obviously, Telstra, Optus and Vodafone have prepaid plans. So do smaller phone companies. We compare all of these prepaid plan offerings and suggest which ones are right for which types of people.

Why smaller phone companies make sense: We think the best prepaid plans are offered by smaller phone companies. We explain why.

Figuring out the data part of your prepaid plan: Data is the most important part of any prepaid plan these days. We explain how the trends revealed by our survey and how they will help you find the right plan.

Prepaid is a range, not a plan

Rather than a single plan, ‘Prepaid’ actually refers to a range of plans. Every prepaid plan is paid for in advance and every prepaid plan offers users access to a phone network and some plan features, for a period of time.

Despite the fact that prepaid plans are the most successful plans in Australia, they’ve had their critics. Some say prepaid plans can be inconvenient. On occasion, prepaid plans run out of credit unexpectedly, leaving users unable to make phone calls or access data through the phone company network. In this situation, a postpaid SIM Only plan would let you make the call or access the internet, they’d just charge you for it without checking. Others say Prepaid is only used by youngsters who have to worry about how much they spend to the penny.

We think these aspects of Prepaid’s reputation are unfair. Recent improvements in the free Self Service apps that phone companies offer, make checking data usage and recharging prepaid services easier than it’s ever been. They all but remove the negative aspects that were once associated with prepaid plans.

Understanding the terminology used to describe prepaid plans

Our advice is to try and understand the terminology used to describe these plans. It’s especially important to understand the term ‘Prepaid Expiry’. Then consider whether extras the phone companies have added recently like ‘data free streaming video’ will sway your choice on which is the right plan.

You need to know what a ‘plan EXPIRY’ is:

Every prepaid plan has an expiry: Every prepaid plan currently offered in Australia assigned a ‘window of validity’ (known in the industry as an ‘expiry’ to the plan.)

It means the life of the plan: An ‘expiry’ period most often lasts either 28 or 30 days. During that time, your prepaid allowance (which means any unused credit on your account) will stay active. While your account is active, you will be able to use the network services associated with your account (for example, text / SMS, data and voice services) and receive calls.

When the service expires, it stops: At the end of the service expiry, your prepaid service will stop working unless you top it up. Some SIM providers allow you to carry data forward (known as ‘data rollovder’) if you recharge your service before the expiry kicks in.

Picking the right prepaid plan duration

Prepaid is not a single phone plan, it’s a range of phone plans. Each of pinpoints a need in the Australian market. For example, long life plan is for second phone users and people who almost never need to make a phone call. There are plans for people with data usage which varies a great deal month to month (data rollover plans) and plans for people who need a ‘data vault.’

Nestled within this range then, there is likely to be a plan which suits you the best. The fact that there’s a range means it’s more likely you’ll find a plan which is just right for you. And that means better value and no wasted money on services you won’t need.

Prepaid offers flexibility in terms of how long you want as an expiry period. Here are the different durations you’ll find on Australian prepaid plans.

Month to month plans: These are the marketing heroes that the majority of people buy. Typical tenure of a prepaid plan like this is 28 days – although you should check when you’re comparing, some of the better value companies offer 30 days.

Daily plans: Telstra, Vodafone and others now offer prepaid plans which can be used – or not used, by the day, according to your need. You can save money here, especially if you are a sporadic user (i.e. you use your phone some days but not every day) but these plans do mean that you need to manage your budget a bit more closely, to make sure you have service when you need it. Oh, and, check the daily price. If you’re using these plans EVERY day, they can turn out to be a more expensive alternative to a longer expiry period.

Weekly, tri-monthly plans: Some others offer unusual combinations of tenure to attract customers with niche needs. Weekly top ups from supermarkets who sell SIMs, for example, can be useful for those who do a weekly shop and can combine the recharge with the store visit.

There are plans you can make a couple of calls per year: Long Expiry Plans Each of the major operators has a long life plan. Typically, you can get your SIM set up to offer you a small number of calls and to stay live for 6 months or even a year, without recharge. Call rates tend to be higher on this sort of plan.

Generally, when it comes to Prepaid Plans, Australians tend to be concerned, according to Telstra, at least, about the mobile data they will be provided in their plan. They want to make sure they have enough data (i.e. that it won’t run out when they need it), the speed of the data they are provided by the network and coverage. Consider how these factors affect you, as you work through your comparisons on this page.

Understanding prepaid plans features (and whether you need them)

Here is how the key features of Australia’s best prepaid plans compare. You will notice a remarkable similarity between them. The key thing to compare is the expiry period. Most Australian prepaid plans have 30 day expiries. Some have 28 days. The difference can cost as much as one additional recharge a year – about 7% of the plan price.

Here’s a summary chart to make it easier.

Use the table above to compare the key features of Australian prepaid plans

Constant innovation and competition have led to a broad range of plans. Such is the diversity available, there is almost certainly one which is (at least) close to exactly right for you. Some of the most important include:

Streamed audio: Some prepaid plans now grant users access to free ‘streamed audio’ as part of the network services associated with the account. Music from from Telstra prepaid Apple Music is sent over the phone company network to your phone – and you will not be charged for the data involved.

Streamed video:OVO Mobile, an innovator in the field are the only small phone company to offer included streaming video services as part of their prepaid plans. You can watch video of Australian gymnastics, Audi racing and more, on your phone, and you will not be charged for the data.

Data rollover: Keep a lookout for data rollover in plans. Some of them have it. There can be a limit to the amount you roll over at the end of the month and you may need to have credit on your account for rollover to apply to you. Make sure you know the rules before you rely on it.

These facilities can save users substantial amounts of data from their plan as our infographic shows.

Some cheap phone plans include ‘zero-rated’ data – also known as ‘data free’ services. These can save you up to 3GB of data each month. Where streamed video or streamed audio is free as part of a plan, the facility is known as ‘zero rating’.

Prepaid plan benefits – is prepaid right for you?

The main benefits of prepaid services are:

Total flexibility: You can leave your phone provider (your phone company) and go to a new one, the minute a new deal comes out. Unlike contracted options, Prepaid Plans offer you complete flexibility in the decision to move on to a better deal. Prepaid plans offer no Minimum Total Cost to pay before you withdraw – one you’ve decided you want to go, you can go. Remember though, whatever is in your plan that you don’t use, you’ll lose, if you leave early.

Total predictability: Manage it correctly and you will never, get ‘bill shock’ with a prepaid service. It’s only possible to spend the value of the plan you’ve bought when you recharge a prepaid service. It’s the predictability of cost that makes prepaid plans a favorite for parents getting their kids a phone service. But prepaid plans are not just for children, anyone can benefit from this service feature. Additionally, prepaid services are not automatically enabled with as many services as postpaid usually are. A good example is roaming. If you want to use your prepaid phone overseas, you’ll probably have to buy a paid extra prepaid service (sometimes called a ‘bolt on’) before you leave. With postpaid, you can just make calls when you’re overseas without checking – but you’ll get the bill later! Making conscious decisions before you spend the money is what makes prepaid predictable.

The same networks: Whichever provider you pick, you will get the same full network whether you buy a prepaid or postpaid service. Whether you spend $30 with a phone company for a prepaid plan or $130 for a new iPhone on a postpaid contract, you’ll get access to the same coverage, speed and 4G data , whichever network you’re on.

The best value – especially at lower spend levels: Prepaid deals are often at least as good as the postpaid alternatives on the market. This is especially true at lower spend levels. The nature of the prepaid market is that it’s more competitive. The fact you can leave when you want to means the phone companies have to fight for your custom. Prepaid services tend to be bought by deal seekers which puts the market sweet spot at around $30 or less a month. Since that’s the ‘prepaid battlefield’ that’s where you’ll find the best value.

Nothing you don’t need: A growing number of people are keeping their iPhones longer than before. Many (both iPhone and Samsung users) are deliberately choosing to not renew their phone contracts when they end. The benefit to the amount they spend on their phone bill is huge. Consider moving from a contract with your phone company to a prepaid plan once your contracted term comes to an end. Your spend can halve. In fact, choose one of our recommendations, below, and you will save more than 30% on what the big phone companies will charge you.

You can keep your existing phone number: The most common question people ask when they are considering moving to a prepaid plan is ‘can I keep my number.’

Keep the phone you love: You don’t need to upgrade the phone you have to use a prepaid service. Early adopters love to have the latest phones and don’t mind paying for the privilege. Many, however, are happy with feature phones, 3G phones or a second-hand phone from eBay / a family member. Your prepaid service will work in any of them. Buying a phone outright and adding a prepaid SIM to it can save you a great deal of money. Increasingly, people are keeping their phone at the end of their contract and adding a prepaid SIM to lower their costs.

You get the same self-service app: And those self-service apps are great. They’re especially great for prepaid users. Most of the phone companies have Self Service apps which are free, easy to use and extremely valuable when it comes to taking convenient care of your account. Take out a prepaid service and you will be given the same self-service app as is available to everyone else. The primary benefit of ready access to the self-service facilities you rely on through your smartphone are twofold: The ability to track your data usage in real time and the ability to top up your account easily. The fact you can do both of these on your device is the boon. It could not be more readily available and, critically, you don’t have to call their call center to do these mainstay activities.

Almost all prepaid plans (certainly anything over $20) come with Unlimited voice and SMS: With Vodafone’s prepaid services and many other plans, you get unlimited voice and SMS on every prepaid plan. With Telstra it’s only the base level offering in which you do not get unlimited voice and SMS.

It’s just as easy to manage as postpaid: Prepaid services are bought and paid for in advance. Then they’re used for the period of the expiry. Then it stops. It can be inconvenient if you forget that your recharge window is about to end. In rare circumstances, your prepaid service can just stop working. However, while maintaining the ability to limit the money you make available to your prepaid service, you can set it up to auto-recharge with most prepaid service providers. Then, you get all the benefits of prepaid and none of the risk of overcharging of postpaid. (Remember, this facility simply adds a single recharge voucher to your plan at the end of the expiry. It does not top up additional services. So, for example, if someone found your phone and make a lot of overseas calls, your extra credit would run out quickly but the core prepaid plan you were on would not.)

They’re the easiest way to try before you buy: Prepaid plans are the best way to experiment with moving to another network. Buy the cheapest plan the phone company you’re considering has, apply the minimum credit, use it for a while. If you like the network, stay. If you don’t, let the SIM die. There’s no contract to worry about and you have minimized what you had to pay to trial it.

You don’t have to use it every day: With prepaid plans, you don’t use it for a week or a month: With a prepaid service, if you don’t recharge, the service will sit on ‘stand-by’. That means you won’t be charged for a while. With postpaid plans you will be charged every day whether or not your phone was used. Be careful though. This is fine for a few days but if you leave it a few months, you can find that your phone number was ‘recycled’! (and then you’ll lose it.)

It’s easy to pick the spend denomination you want, depending on your current, specific needs: Recharging a prepaid service is like getting money out of an ATM. You get what you need and no more. With a prepaid service, if your usage is going to be relatively low one month, you just buy less. It’s usually far harder to move (especially down) plans with a postpaid service.

You get incredible introductory offers: The prepaid market is a battlefield for the phone companies. Because customers are not in a contract, they move providers all the time. This means the phone companies have to constantly put in market attention-grabbing deals to get you to switch. You’ll usually see a combination of extra data and a lower priced starter pack to get you going. These sort of deals are far less common on postpaid services.

4G data network coverage has never been better: If you’ve got a phone that you paid more than $200 for and bought after 2011, you’ve probably got a 4G (LTE) device. 4G is super fast data and it’s now offered by the 3 major Australian phone companies and a number of the smaller ones. You can find out more in our article about coverage.

The network coverage and speed you’ll get on your prepaid plan

Buying a $20 prepaid plan gives you exactly the same network access and speeds as a $150 iPhone contract. The 3G and 4G coverage we receive in Australia are among the world’s best which is remarkable given the geography of our country. We’re in the top 10 countries of the world for 4G coverage and signal availability and that number is still improving. For example, these statistics, from Opensignal show coverage of 84.3% on average across all the phone company networks. That’s up from 79.3% just 6 months ago.

Prepaid plans are often the best value. They give you access to the same network as more expensive plans but they cost less.

The key thing to notice is that the 4G networks are pretty much the same now. Whether you buy you’re prepaid plan from Optus, Telstra or Vodafone, the speeds and coverage you will get will all be very similar to each other. Our advice is to base your decision on the amount of data that is included in the plan, not the network you think it best. There really is very little difference between them.

Prepaid plan data speeds are exactly the same as the data speeds you’ll get on other plans.

The bad bits about prepaid plans

Strictly speaking, some of these ‘not so great’ elements of prepaid plans also apply to SIM Only postpaid plans. You still need to be aware of them when you’re considering your prepaid service though.

You won’t get a new phone: When you take out a contract with a phone company, in exchange for a 2-year commitment, they will (often) give you a new phone. The reality is that they recover the cost of that phone in the rates they charge for the plan. There are times when it makes sense to get a phone under contract rather than buy the phone and add a prepaid SIM yourself.. In certain circumstances, usually, when they’re chasing sales, the phone company will subsidize more of a phone than they usually would and that can actually save your money over the course of the contract. It’s possible that, for some people, the upfront cost of a phone would be a strong enough barrier to prevent them taking out a prepaid plan. In that situation, a prepaid plan might not be the right thing to do.

Prepaid services can run out of credit when you need it most: In the middle of a call to tell your girlfriend you’ve left your wallet at home, your prepaid credit runs out and you can’t top it up because, that’s right, you’ve left your wallet at home. New smartphones have all but removed this problem from Australian prepaid. Most of the phone companies zero rate access their own sites. To you and me that means that even if you have no call credit, you’ll be able to browse to your phone company’s website. Once there, using the details you have saved on their system, you’ll be able to recharge. These days, this risk applies most to people who have older feature phones and who leave their credit card at home a lot.

You may not be able to recharge your service until the expiry is up: There are times when you will accidentally use all of one inclusion up. Mostly, these days, it’s data which goes first. Imagine if, in the first week of your prepaid agreement, you had a prepaid plan which cost you $35 and came with 8GB of data in it and you tethered your laptop to your computer to use it as a modem (or used all your data in some other way.) The cheapest way to get more data would be to just recharge again. Paying $35 for 8GB of data is much cheaper than paying overage fees of $10 per GB – which is what most phone companies will charge you. Some – e.g. OVO Mobile – won’t. Hobbling along to the end of the month using data at $10 per GB is no fun at all. Make sure you ask the chat function of the phone company you’re considering signing up with what their policy is.

Usage alerts can be delayed for up to 24 hours: Australian telcos are required by the regulator to send you notifications at different stages of your usage. You’re supposed to get a text message from them telling you that you have used 50%, 85% and 100% of your data allowance. Unfortunately, these messages can take 24 hours to get to you. If you work through your data allowance very quickly, you could use up all of your data before you even get the 50% notification. The result can be confusion as to how much data you have left and a period during which you can’t access data services. The best way to manage this is to use the Self Service app the phone companies have to see how much data you have left on your account.

If you top your prepaid plan up too much, you could start to suffer some of the negatives of postpaid plans: You’ve got to go out of your way to get bill shock on prepaid plans. However, it can still happen. Users who treat their prepaid service like a postpaid service could still get hit with charges they weren’t expecting. This is best explained with an example. Imagine you buy a Boost Mobile prepaid service. You go for the $29.90 plan. However, instead of charging your account with $29.90, you add $100 to your account. In this circumstance, if you use all of the data included in your plan within the expiry you have, extra data usage will incur an ‘out of bundle fee.’ If you had only recharged with $29.90 (what most people do) then there would be nothing for Boost to charge you. There would be no balance for them to take the money from. In this example, however, users can be charged from their $100 balance. Our recommendation is simple. Just recharge at the end of your expiry with the value of the plan. Then there are no headaches.

Comparing prepaid plans to other types of phone plans?

In Australia, we’re pretty lucky. For us, the difference between prepaid rates and postpaid rates are actually quite small. In some cases, especially spends around the $30 mark, you will get more value on a prepaid plan than a postpaid plan from the main phone companies. Where prepaid value really comes to live is with smaller phone companies. Kogan Mobile, OVO Mobile, Boost Mobile and the rest of them who resell the phone networks offered by the Australian big 3 phone companies.

As we’ve seen above, on this page, they have brought new service aspects to the prepaid market, targeting niches and better servicing the market. They also provide better value on core inclusions like data at every price point – as you can see from our comparison ‘best of the best’ table at the top of this article.

We think prepaid is a suite of plans which offer great value and which you should definitely be considering in your prepaid plan choice.

You have around 50 phone companies to choose a prepaid plan from

The first thing to be aware of when considering the prepaid plan which might be right for you, is the power you have as a consumer and the number of options available to you. One of the first questions in our survey asked respondents how many phone companies they thought there were in Australia.

We found that very few of the people involved in our survey actually understood the huge range of phone company and prepaid plan options available to them. There are around 50 phone companies in Australia, a fact that only 25% of people correctly identified. The vast majority of these companies offer a prepaid version of their plans. The power to find the best plans from such a broad range is what will help you find the best deal.

What this survey finding means to you:

Consider smaller phone company brands you might not know: Most of the 50 phone companies we’re talking about are smaller phone companies – phone company brands you might not be that familiar with. It’s worth considering giving them a go. As we cover in more detail, below, picking a prepaid plan from a smaller phone company involves almost no risk. If you try a new prepaid plan provider, and you don’t like an aspect of their service, it’s a simple matter to either move back to your previous phone company or to try a brand new one. In reality, most people are more satisfied with the service they get from new prepaid providers than they were with their old provider. The truth is that many small phone companies offer better customer service than some of the more well-known brands.

Remember the network access you get is very often the same: When considering phone plans from smaller phone plan providers like OVO or Yomojo you will get exactly the same network coverage and performance as if you had gone directly to either Vodafone or Optus.

Find a plan which suits your specific needs: We show plans in the table above, which offer a multitude of different facilities. There are daily pricing structures which mean you don’t get charged when you don’t use them. There are long life plans, with ‘expiry periods’ of several months. With a little research, you can find a plan which suits the idiosyncrasies of the way you use your phone.

Awareness of these options is clearly increasing

When you consider the entire population of Australia, many are unaware of the number of phone companies that provide prepaid plans. Things are different when it comes to Australians who have recently undertaken the task of comparing and moving their prepaid plan.

The cost of users’ current plans and promotions from competitors drove Australian phone users to try low cost operators.

The number of people choosing their mobile prepaid plan from these smaller phone companies is clearly growing fast. Nearly 50% of people who changed phone plans in the first 6 months of 2017 decided to try a low cost operator or MVNO. This is an enormous change which has taken place over a small time period. Vodafone, Telstra and Optus are being displaced by the phone networks which resell their services.

The reasons these low cost operators are experiencing the success they are can be simply explained by the same research. As we’ve said on this page, the big phone companies are selling value added services which do not appeal to everyone. Their high prices and the strong introductory offers which surround prepaid plans from these phone companies attracts those who are in the market.

Prepaid plans with unlimited data

Our survey makes it clear. The chart above outlines the amount of data that people in our survey needed in their phone plan. A small proportion of people use a lot of data. About 20% of people use 11GB a month or more at the moment.

Most mobile phone plans already include unlimited voice and SMS. Some even include unlimited international calls. The reason these plans are so popular with people isn’t hard to see. Mobile plans with unlimited service inclusions (like unlimited voice/SMS or unlimited international calls) solve a real customer problem. They mean that no one has to worry about blowing their bill, using too much data, at any point. Once they’ve bought that plan, they can use it all they want without worrying about paying more.

37% of Australians say they want a phone plan with unlimited data.

The problem with unlimited data in a phone plan

In the past, when, for a period, phone companies DID offer plans with unlimited data inclusions, a small number of their customers used an unholy amount of data – as in hundreds of GB of data per month. That means the maths doesn’t work for the phone companies. Those phone plans were unprofitable.

Smaller phone companies rent the network and effectively pay per GB for the data they sell you. With this sort of ‘abuse’ (when customers use hundreds of GB of data) those small phone companies lose a lot of money, selling unlimited data plans, and would rather not offer them. Even for the big phone companies which own their network, offering unlimited plans could reduce the number of connections they have and the money they make. When customers (or potential customers) can buy a SIM with unlimited 4G data, which is as fast as their home broadband connection – why have any other service? If, say, Telstra offered unlimited data in their phone plan, people could move away from having a SIM in their tablet and a home fixed broadband connection. They could just tether everything to their phones and use their unlimited data.

Other problems with offering an unlimited plan include the regulation (some would say over regulation) of the Australian telecommunications market. Again, as we’ve covered above, the Australian regulator which manages the phone companies is extremely sensitive about the word ‘unlimited’ in phone plans. After a long list of complaints in the past, any plan which says ‘unlimited’ is going to have to be unlimited. In other countries including the UK and USA, unlimited plans are offered. However, they often have a ‘catch’. Many are cleverly limited to avoid abuse of the system. Giff Gaff, for example, in the UK, avoid the word ‘unlimited’, calling their plan ‘always on’. The plan has about 30GB of 4G data and is then ‘throttled’ – an agreement under which data speeds are slowed down beyond that 30GB limit to 3G speeds.

Further down the line, unlimited data could become common

Mobile phone plans with unlimited data may well become commonplace in the future when 5G services are rolled out in Australia. 5G will be here in 2020 – that’s just 2 years from now, and will have data speeds which are incredibly fast – perhaps a hundred times faster than 4G speeds now. That will create a lot of unused network capacity (much like TPG’s new network will) and potentially mean it makes more sense for the phone companies to offer prepaid plans with unlimited data.

What to do in the meantime if you want unlimited data

Its not unlimited just yet, but the data in phone plans is getting cheaper each year. As you can see from the statistics above, unlimited data plans are available elsewhere but actually, not many people use them. Our advice is to figure out the data you really need in a phone plan and buy something to suit. For now, Moose Mobile, OVO and others offer data bundles of 30GB or more per month at reasonable prices – which get more reasonable every year.

From what we can see, in the next couple of years, prepaid plans with unlimited data will start to arrive. Until then, you’ll have to settle for unlimited voice and SMS inclusions and a lot of data!

Summing up

Prepaid plans are Australia’s favorite type of phone plan. The list of benefits associated with this plan type is huge. Unfortunately, there is, if anything, too much choice available and that can make it hard to decide. Considering what you need in your plan and looking at the prepaid offerings from smaller phone companies is a great place to start.

Use our survey results to hone in on exactly what it is you need, especially when it comes to the data aspect of your plan. Make sure you manage your prepaid plan effectively when you have one and check in again in a few months. The value for money you’ll find in your plan is likely to have increased even more by then.